DRAM Consumers Accuse DRAM Makers of Artificial Price Fixing

It is not a secret that makers of dynamic random access memory (DRAM) sold their products below or at manufacturing cost for the vast part of the last year and in a bid to boost prices started to cut down production at the end of Q3 2013. As expected, the prices went up rather significantly and now customers of DRAM makers accuse them of artificial price manipulation.

“It is quite strange that the global memory chip market is seeing unexpected price rises amid less demand for conventional personal computers. It is highly possible that the chipmakers are engaged in price-fixing,” an executive of a South Korean electronics firm told the Korea Times web-site.

There are currently three big suppliers of DRAM: Samsung Electronics, SK Hynix Semiconductor as well as Micron Technology which already controls shipments of Elpida Memory as it finalizes the acquisition of the company. All three suppliers have reduced production of DRAM to stabilize pricing, which increased contract prices of DRAM by 35% since November, according to DRAMeXchange market tracking firm. However, Micron is facing the most significant critics from the South Korean clients.

“Among other firms, Micron Technology is apparently using its commanding position to manipulate computer chip prices. We are watching it closely,” said the person who wished to remain anonymous.

In addition to reducing production of commodity DRAMs, memory makers are boosting output of various mobile types of memory, such as LPDDR2 and LPDDR3 that are used in smartphones and tablets. As a result, while the demand for PCs is weak, the prices of commodity memory are growing. Moreover, since the demand towards mobile products is high, the LPDDR memory remains rather expensive as well.

“Seeing these data, I personally believe there is a possibility that producers could be engaged in a pattern of anti-competitive acts and practices as they did in the past, resulting in adverse effects on consumers,” another DRAM customer said.